tv Bloomberg Markets European Open Bloomberg March 18, 2021 3:00am-5:00am EDT
>> good morning, welcome to bloomberg markets, european open, i am anna and lourdes live in london. mark cudmore joins me in singapore to take us through all the market action this hour. just less than an hour away, here are your headlines. stocks rise as jay powell comes out swinging in the fed. he promises the central bank won't raise rates anytime soon. the eu braces for a decision on
astrazeneca's vaccine. blocks health regulator rules today on the shop safety. in the bank of england is expected to emphasize its high bar for tightening monetary policy. we look ahead to today's rate decision. good morning, just gone 7:00 a test 7:00 in london. welcome to the european markets opens. mark joins us this hour, and post fed, what are the market saying to you? mark: the most important thing is, this is a fed meeting with legs. i find that we spend so much time parsing a fed meeting with the message has been quite simple. in contrast, this time around, i think the markets are under interpreting, so far, just how momentous yesterday's meeting was. the fact that they were so extremely dovish, they can't keep rates on hold, even this -- even though they say we will have strong growth and reach the inflation target. we are still not going to hike rates. and that's a really massive
message that the markets fully have not understood yet. anna: some kind of real shift in thinking expected for markets. let's just break it into our fed coverage just for a moment to think about what's going on on the breaking news front. key one retail sales, this is the delivery service that delivers to your doors. they do it during the pandemic. already 9.7%. giving us an idea of where they will be opening their and their facilities, seeing positive relative growth versus their corresponding time and talking about encouraging responses from international partners. we keep an eye on that one. that will be one of the stocks we are watching at the start of trade. let's get back to the european equity markets. the future story, just under an hour away from the cash equity open, this is what we have for you on futures. european futures pointing to the upside. we saw modest gains in the u.s., but modest gains didn't hit a new record. european market had modest
declines in session. we do expect a little bit of catch-up here in europe. u.s. futures also pointing to the upside. the nasdaq a little calmer. futures then flat. the kospi, both sides of the atlantic. asia is really getting a boost from the tolerant fed. that fed dovish and certainly weighed on the dollar. we have not seen an enormous amount of movement since we got -- since we saw the dollar drop. we will keep the sovereign story on japan. more for markets as we go through the hour on that story. the curve is a real thing to watch for. i saw the u.s. 30 year being sold off. steepness in that curve is a focus for markets. let's get back to the conversation around the fed, a green light to price and more inflation, a green light to send these curves steeper, is that also what you took away from this? mark: i think that is the big takeaway. we will have much deeper curves in the u.s.
we need to think about change of horizon of where the 10 year can get quickly. i think it was only a few weeks ago where we saw 2% seemed like a fantastical level. i could see us reaching that level very soon. we would basically be told by the fed that they want to see rapid inflation, runaway inflation before they react. the only message you can get is that the front end will be anchored in the back end will have to steepen. because the fed is saying, we want to be behind the curb. it's not that we are worried, we will have to wait until we are behind the curb to start pushing back. anna: there is nothing preemptive about the messaging from the fed. nothing about trying to get ahead of the action in the inflation story. they want to see the inflation in the concrete data. is that what you are talking about when you say that the big change, is that with the big change is? is that why we are saying it's back to what we haven't seen for a decade or two? market: i think that is one of the big changes. one is the fact that it was even
more dovish than i think we could first envision, just because they said we want to be behind the curve. i don't remember the fed being so sensitive about saying we want to be behind the curve, we want to see inflation right away. that was the big message. the second one is that we are suddenly demoting the importance of forward guidance. it has dominated bond markets for the last decade, suddenly they are saying, stop worrying about the forecast. you're not hiking rates soon and we won't see them before we see the data that says very clearly we need to hike. we might need to change that add-ins in the future, but don't be worried. the drone pile set in the press conference at the long-term forecast, not to put too much weight, but it's all about the data being more important. if we start seeing data prints that see high inflation -- high inflation already in the highest since 2000 eight, that could start scaring the markets. anna: so we are back to a
pre-gse era. so there will be focus on that data and just how scary or otherwise it looks. what is it mean for broadening risk assets? what is it mean for stocks? you talked about ecb and positive, but tentatively positive for stocks. why positive? other say you could salivated, two more years of caffeine, that one of the lines coming through from bloomberg this morning. one of the quotes from an investor, salivating over the caffeine to come from the fed. mark: it's a great quote, i disagree with that interpretation. i think the initial reaction is, yes, the super dovish fed could have risk assets. pile in. but on the secondary risk concern you realize, they are saying they will be buying the curve, that means the long-term projection is not even valid. they said we won't be premature at forecasting a hike. that means they are admitting the fact that markets will force them to hike earlier than they
are currently planning. the point is, we know that inflation is going to run hot. we know this is going to be a market that tests the fed. that will become a more difficult market to play as we see very, very steep curves in the u.s. and other markets as well. some stocks will do very well, other ones will do poorly, it's just the sustainable trend is a lot minute. it's not just a green light to buy risk assets blindly. anna: let's leave that conversation for a moment, we will be back to it. during our conversations, you can get analysis and insight from mark in the markets live team, go to mliv , that is the function to use. couple of breaking news lines to go through, we have movement in terms of the national grid. strategy, saying it will sell for equity value of $3.8 billion. and it is going to buy another business, investment business for $7.8 billion.
a change coming through at national grades. also want to mention what's going on. a drink business, a mixing business, and they are giving renewed guidance, saying it's appropriate to reintroduce guidance for 2021 after a previous hiatus. they have seen revenue growth between 12% and 16% growth. we will watch it at the start of trade when it comes around 62 minutes time. coming up on the program, the european commission president threaten to withhold vaccine export. we bring you the latest on the chaotic vaccination rollout. plus, the dutch prime minister becomes the country's longest leader at the secured -- as he secured an election win. but what does it mean for his approach to the eu? he discuss all of that with maria, who is a deputy director, that conversation is coming up later. up next. >> there is more and more of a consensus building, this rate increases coming faster than the
>> my message to the fed is, things are going great, don't mess up all the hard work we've done for you. >> there's more more of a consensusbuilding, this rate increases coming faster than the chair has advertised. >> there will be a mandatory risk inflation. i don't expect the fed to confront an inflation crisis as a result of this. >> i think the bigger concern is
what happens down the road if the federal reserve is really too slow. >> i think this is something that they are thinking about, but is not the main thing they are focusing on right now. >> we are comfortable with overweight equities, u.s. equities given the stage we are at in the recovery cycle right now. anna: a number of our guests on bloomberg tv reacting to the feds guidance. i wonder what the fed wants us to take away when it comes to inflation. we are hearing from one of the guests about how there would be a temporary burst in inflation, and many people are looking for that. on top of that, do we see a structural change where the fed wants the market over a more medium-term to factor in a higher inflation environment? mark: -- >> i think they want us to believe inflation is coming. they are happy to see inflation expectations rise. they might be worried that they cannot get back and they let the
inflation genie out of the bottle, but for now they are very happy for our imaginations to run amount. so for inflation to elevate from here is the only way to break the spiral of disinflationary inflation -- plate that we face this decade. >> fed chair remain dovish stressing the federal bank will raise rates until 2024. that is despite upgrading the banks economic outlook for the united states. the central bank now expects 6.4% growth in 2021 because of fiscal stimulus and an accelerating vaccine rollout. powell also downplayed mounting inflation worries about the recent jump in treasury yields. we are joined by the cio of brooks mcdonald asset management. good to speak to you. it's interesting to see this higher guidance on growth, higher guidance on expectations around close -- growth and inflation from the fed. i read some people saying, if we get the inflation numbers from the fed, 2.2%, that we will see
the fed have rates before 2023, if those numbers do come to pass that they are waiting for proof in the data. with that be your expectation? >> the key question is whether this is sustained or whether it's transitory. that is the big tug-of-war in the markets at the moment. and no one is entirely sure. we won't really know until the end of this year, which of those are the eventual victor. but the fed reserve yesterday was in that transitory camp. i think most people, almost everyone is saying there will be some hike in inflation at some point this year, partially because of demand supply, but will that be sustained? the federal reserve, for the time being, is saying no. mark: transitory first a sustained inflation is the biggest issue. what are you looking for yourself as the lead indicator for that issue? yes, we may not know the answers until the end of the year, but
that might not be profitable. what are you looking for as a lead indicator? edward: these tectonic shifts we are seeing in markets are already see leadership change from day-to-day and week to week. certainly not one to sit on the sideline for. we have all been looking at the core cpi numbers when they are coming out of the united states, in particular, we look at ppi numbers and we see whether this is going to reduce the prices. most importantly, we will be looking at the employment data. there will be a meaningful shift in terms of the backdrop. we will see full employment, but also for full employment to lead to wage increases. that's what we did not see pre-pandemic, and that's what we will need to see post-pandemic, sustained inflation. anna: the link between those two, ever wet. in terms of inflation expectation, you talk about something temporary, you said
debate and markets, whether it is temporary or sustained. there have been various voices suggesting this could be something more sustained. deutsche bank saying more people are looking for inflation on google than any time in 2008. it's not your everyday indicator, but it's something to look at when it comes to expectation. would you explict -- expect inflation to come back down to levels we would recognize in recent history, or do you expect it more -- at more elevated levels? edward: we will likely settle around that 2% level. some of the disconnects that we have seen will be evened out by some of the huge amounts of stimulus we have seen. one point $9 trillion stimulus from the united states is at the top end of what markets are expecting, and it's coming at the end of a pandemic. i think that will help demands for the next few years, and that will help inflation, but i don't yet see signs, we think inflation will get carried away, that's because of those huge
disinflationary pressures pre-pandemic. i'm not sure the structural shift has happened yet. keep that being sustained well above that 2% target. jackson hole last year, jerome powell said he would be comfortable with and above 2% for some time. and as mark alluded to, one of the problems central bankers have over the last decade is trying to generate some inflation. i think central blank -- central banks globally will let inflation run a little bit hot in the short term, as long as it does not mean they lose control over a long term. that is a very difficult balancing act. mark: i completely sympathize with your view on the driver. i am impressed you believe the curve will work again. i guess my big question is, do think the fed risks losing credibility, or you do -- or do you think the move was smart? edward: the credibility part is entirely -- whether we and greet on the
temporary inflation camp, if we see the continued upgrade of gdp estimates, and inflation estimates, no rate rises on the horizon, i think at some point there will be a credibility gap. probably not a problem for today because of the fact that the fed has been pretty clear that it wants to see what happens in the near term first. but i think, as we progress this year, we have seen a few members start to move and get tight and 2022 and 2023 that does not mean consensus. i think there is a fear within bond markets that they will look at what the fed's reserve is saying, if it is not reflecting reality at all. anna: cio at brooks mcdonald asset management. further thoughts and just a moment. just imagine where we are at the u.s. tenure story. 1.69 -- 1.69 40. we are seeing some bond market
selling. eels are going high. yields on the u.s. 10 are going higher. and it's for the thirty-year as well. we will keep watching this. when you get to 170 this morning. here is laura wright. laura: the dispute between the u.k. and e.u. over vaccine shipments is escalating, london is morning it will have a slow down on the rollout because of a cut in supply. it comes after the eu threatens to halt exports of the vaccine to the former member states. the blocks as all options are on the people to secure enough doses. the dutch prime minister has won a clear victory in the nation's elections. according to exit polls, he will have a fourth term in office to become the longest serving premier in the nation's history. with the 150 seat, it he will have to put together a coalition government process that could take months. j.p. morgan and bank of america are condemning racism against asian americans. it follows a shooting in atlanta
where a man killed eight people, including six asian women. is the latest in a surge of violent injuries in the coronavirus pandemic. uber's diversity chief said it's part of a long history of discrimination. >> 20 years old, 30 or 40 years old, but it goes way back to the 19th century where the u.s. passed the chinese exclusion act of 1885 because of what was then the yellow peril. laura: global news, on bloomberg quicktake, powered by more than 2700 journalists and analysts and more than 120 countries, this is bloomberg. anna: laura wright in london. coming up next in the next hour, we will be keeping it on the central vaccine. christine lagarde looked -- discusses monetary policy with eu lawmakers. we will bring you highlights of that conversation that starts at 8:00 a.m. london time.
anna: welcome back to the european market open, 40 minutes until the start of the european equity trading sessions. european futures on the upside. we underperformed yesterday in europe compared to the u.s. nasdaq features inching to the downside. there is a lot of central-bank action to talk about today, we will come to the bank of england later on, we talk a lot about the fed, the bank of japan, interesting reports there after being focused with the yield curve, the bank of japan has been reporting flexibility they might allow around certain yield. mark: they did talk about widening the window of their yield curve targeted band to 25 basis points, which did cause shock reaction. people eased off and realized
that it may not be to consequential, but it is a likely move. i think it again sense that sentiment that central banks, at least mental -- many central banks, are willing to let the back end of the curve's rise. maybe not the ecb, but the boj is not alone supporting the fed and saying, let those curves steepen. anna: that seems to be the green light we have been given. in terms of markets now, 10 year yield is on the rise at 17%. will it get to 1.7, there you go. let's get back to edward park, he is still with us. we have seen that yield that 1.7%. what does this do to your investment strategy, before assuming more inflation, even if it's temporary, if we see yields go higher, what is that doing to your asset allocations, to the places in the stocks a regent -- arena that you put money? edward: i think we are at the lows that we saw in 2019, and in
that context, if you look at what we saw in the earnings yield in u.s. market, one of the richest markets, that's still 4.5% based on the next 12 months earnings. that is still a lot more attractive than the u.s. tenure at 1.7, even as the u.s. investment grade at 2.73. for us, we think an overweight position in equity still makes sense. that said, within equities, i think balance is absolutely key. we talked about that sustained temporary inflation camp. that will determine the market leadership between six and growth. and it's too early to say which one of those two will win out. so we have got balance with six expressed through the u.k., and through asia and japan, and growth, which we expressed through technology, health care and sustainability. really it's about balance and 2021 for us. mark: if 1.7% yield don't worry you, what level does worry you?
it might be close to 2% the next couple of weeks with the way it's going. edward: if we do see a continued rise above 2%, at some point, that will feed into relative valuation. but you look back to the 2000s, last time when the u.s. equity market was still out trading on a similar multiple, you were seeing u.s. 10 year giving you 6% and 7% yield, and that was when it was very powerful. i'm saying you need to get to that before it starts putting pressure on equity. but at the moment, it is one of the few assets that will try a real return. anna: just over a two day charter for 10 year yield. we are seeing the spike that we have now, and it goes above 1.7 1%. edward park, thank you for joining us. as i said, central banking watch continues.
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anna: welcome back to the european market open. half an hour until trading. futures are pointing to the upside. the u.s. futures picture has been deteriorating. nasdaq is down. at the same time, we see a rise in u.s. 10 year yields, we are steepening the curve more broadly. this steepening is being factored into markets and it is not looking positive for markets in the short term. >> no. it is not great. last time we sought the curve steepen this aggressively was
the early part of 2008. most of you remember it was a tough year for markets overall. it happened in january, february, and now it has started again. not a great sign for markets. anna: we will come back to that conversation. we will talk more about the fed conversation. at the moment let's get a first word business last. laura: disney plans to reopen to theme parks on april 30 after more than a year of them being close. they are among the last two welcome back customers. they will be limited to state residents who book in advance. >> we are thrilled with response we have seen from guests in term of future reservations and intent to come back to the park. it is a function of two things. one that we are seeing the light , and another that we are seeing
trust in our brand. laura: germany's most valuable public company has been driven by growing investor confidence but can challenge tesla as global leader in electric cars. that is the bloomberg business flash. anna: today the bank takes center stage. analysts are focusing on the tone and outlooks from that u.k. central banks. the governor speaks to a brightening outlook for the economy and a so far successful vaccine program with an unplugged -- with unemployment at a five-year high. joining me now is pooja kumra, senior european rates strategist at toronto-dominion. higher growth expectations, do
you think the bank of england is also dealing with higher growth and inflation? what is the key method you're looking for from the bank of england? pooja: good morning. we had some this week as well. there was pushback. in this meeting as well, it did sound a bit optimistic when it came to the forecast. when you see how we moved from then to now, it is more favorable for the u.k. the vaccination is much better than what we are seeing in the u.s. we have 100 million vaccinated as compared to 10 million in euro. we have an extended scheme, taxes being cut, as well as more
support for the household sector. the fiscal evening was not taken into account. the data so far has been much more than what was projected in the fed meeting. i don't expect pushback against the ongoing increase, at least in the gilts. the guilds do have very strong. if you see u.s. at that mark, you can see they are heading to both levels and we could see the steepening if the courses continue. even if stimulus does not increase, it will move right now. maybe later it will fully start.
mark: good morning. we have been told by the fed, at least they are claiming they will not hike rates until 2004, -- 2024, do you expect them to hike? pooja: markets have been aggressive in hikes in the u.k. they were being in 2023. that was aggressive. i think it makes sense after the fed eating when we are being told that they are not going to implement negative rates and secondly they also told us they are doing on -- a consultation on how they are able to reduce their assets. that was pretty aggressive on their part.
i don't think the u.k. will go before fed. i think everyone wants to learn from the fed experience. you need to go slowly, especially given the fact that the market is still a big concern for the u.k. and we do not have the big stimulus that the u.s. has. they want to get back to the sustainability levels. anna: i was looking at what is going on on global curves because we talk there about the u.k., we talked about the u.s., there are links that the steepening is having impacts around the world. we also see german bond curves steepening. the highest since january 2020. i wonder if that kind of move
threatens that strategy? pooja: yes. this morning we also had news around changing the 10 year. you can see that steepening across given the fact that we have all central banks, not really about the increase in rates. the message we get from ecb is the policy between the fed and the ecb is likely to die in the coming months. they told us clearly they cannot accept the uncontrolled increase in rates. they will bake increasing from april onwards. i think right now, we do not have that much evidence that ecb is buying a whole lot. from april on, they will increase their pace. i think that is where you could see the divergence.
that is how you would expect it. given the fact that the ecb is being comparative. we are going to absorb everything issued in the coming months. mark: given the pace that we have seen the yields move, what is the highest level you think we will see in 10 year nominal yields in 2021? pooja: we have our year in caste to be around 2%. the more egregious is basically challenging the diffidence used. i think that is when you see investors questioning, do they want to go out of treasuries or do they want to return to treasuries? i think we are reaching the levels where we could see
retreating right now unless we get another stimulus. right now, i think it is most stable. this is force-fed reaction. it is adding to the fodder set off in the treasuries. i think we are reaching the levels the markets will start questioning. also, this increase in rates has been delivered. it starts hurting equities as well. anna: something we will think about. pooja kumra senior european rates strategist at toronto-dominion bank. we are seeing the yields continue. it has been higher, but dropping again now. it has been up to the 1.72 level and above. as a result, we have seen weakness in u.s. features.
don't miss our coverage on the bank decision. we will be talking about expectations in the market for that. and we will bring you that live coverage. that is not the only central bank in action today in the next hour, ecb president discusses monetary policy with e lou lawmakers. we will bring you the highlights. this is bloomberg. ♪
>> consumer demand is extremely high. we have seen material increases in consumer spending and that is before the stimulus checks have arrived which are -- the deposits are arriving today. you put all those things together plus ongoing support of the fed, we are really bullish in terms of what the corridors could look like.
anna: wells fargo ceo there. very bullish comments coming from wells fargo. bank of america also telling us that the boomers are spending again. even before the stimulus checks arrived, things are looking brighter in the u.s. we are seeing plenty of upgrades in the u.s. mark: it plays into the scene you are talking about. growth is very strong and therefore inflation will be very strong this pulls into the yields argument. even as european forecast have been downgraded. now the u.s. is meant to grow way faster than europe. 1.4% faster than europe. it was only november third went the elections had europe growing faster. that shift has been massive in favor of the u.s.. anna: absolutely.
i remember last summer talking about the european recovery. let's talk about the ipo phenomenon as well as this fact phenomenon. they have raised euros by selling shares of their mobile phone. trading of the towers will start today bringing europe within sight of a record is quarter hall from an initial public hauling -- offering. dani burger is here with a look at the phenomenon it is the ipo market right now. dani: we have seen this healthy pipeline of these bigger, billion euro plus ipo's. advantage towers is going to be the 6-1 we have seen so far. it is priced towards the lower end but in general, these big ones priced towards the top end of their range and saw a pretty sizable first day pop. 28% vantage power re-create.
the demand is there and what is said to be a record quarter. if we compare to what is happening in the u.s., the u.s. is beating europe by a longshot when it comes to number of ipos listed. when you look at the one billion plus ipo's, they have not had the best reception. that is 11% drop on its trading day. the other thing we have to keep in mind is that if we take out the specs, this is very different. i strip them out from both the u.s. and europe. europe has seen more ipo's than the u.s. has. you could look at this in two ways. perhaps the uss pete, or --
perhaps the u.s. has peaked, or we are missing a potential chunk of ipos we could be getting if we adjust our rules to court the stacks. anna: we will keep an eye on advantage towers and the broader ipo. we should bring everyone up to date with everything going in the markets. things are moving fast considering the amount of distance between us and the fed. u.s. 10 year yields did go up briefly. we have seen the pop up higher in the dollar. equity markets not taking this well. nasdaq futures down over 1%. her thoughts on why we are subtly seeing this happening quite quickly in markets. mark: a very exciting day in markets. one of those days you want to do this job. in april of last year, the
treasuries were dead after being an instrument. now they are back and they are causing turmoil and everything else. as we mentioned earlier, the message from the fed, even though it is unambiguously dovish, it was not positive or near the dollar. this is a new message for the stock market and the dollar. i don't think those trends continue. the only continuing trend is the steepening yield curve. that will support the dollar and be bad for stocks. it is what we talked about earlier in the program. anna: it is interesting that treasuries were quite calm. in the immediate aftermath of the decision, not factoring in this kind of move. 1.73. let's get back to some european politics, vaccine rollouts, that
story, that narrative as well. the dispute between the u.k. and the eu is escalating. london is warning it will slow down rollouts because of inconsistent supplies. it comes after the eu threatened to halt vaccine to its member state. meanwhile europe is bracing for a decision by its health regulator on whether astrazeneca's vaccine is safe to use after concerns about blood caught. the agency has backed the shot, we are expecting a press conference today. european authorities have suspended the vaccine of astrazeneca but they are also attacking the company for not delivering enough. we heard strong words from them yesterday. what you make of it? maria: there was very strong language from the head of the
committee. it is understandable that it seems like a contradiction from the outside. the timing of that seems to be off, given the kind of week we have had given that it has been suspended for days now. the way the commission would present this is you have to make a clear distinction between the vaccine and the company. when it comes to the company, they painted a negative picture. they said it had underperformed, under delivered, the spirits had been painful, it slowed the rollout and overall, it becomes a company that it cannot trust or rely on. if you look at the actual track record of astrazeneca when it comes to deliveries, the reality that it is not good. they promise vaccines, it was cut, and then cut again. you look at the second quarter -- remember the company said they were going to step up production for european deliveries -- they are also
looking at another to do percent cut. -- another 50% cut. that is where that is coming from. the reality is the production and deliveries have been disappointing. although they have problems with astrazeneca, they did say pfizer has been doing better. they expect more doses for european deliveries. that should give renewed momentum to the campaign. they say come september, they can get to heard immunity. that goal is still untouched. interesting developments. anna: remember to keep it here with bloomberg. we will bring you decisions from the european regulator a little later. you can follow along with our top live team on the terminal who will be live blogging the
anna: welcome back to the european market open. seven minutes until trading. futures are pointing to the upside. let's get individual stocks. dani burger has details. dani: most of these are related to them being embroiled in the capital scandal. they might expect defaults on some of those supply chain notes. they will be suspending bone -- bonuses for top managers.
another think that they are looking at, because of the fallout from the scandal, they will be separating asset management division from the international wealth division. it will be managed as a new, separate business and it will have a new head is a veteran. looking ahead to other stocks, grocery store specifically. very strong quarter. the question is whether or not they can keep that up when things open. the ceo says this is a permanent shift. giving a 2021 forecast, something they have not done yet. at the high-end, they see 16% growth. that is in line with what analysts see. because that is at the high end, we could see a little bit of a disappointment that they did not give us a bigger rage. -- range. anna: thank you for that. really interesting stories there to keep an eye on.
the big picture, mark, that we need to reflect on is stocks, futures selling off. nasdaq futures down 1%. mark: i think there is going to be more pain in markets today. we have to watch for those hidden structure notes, the pain we were not expecting from people who had exposures they were not aware of. we just passed an event that was meant to curtail this move. we have acceleration on the upside and no break. we have moved beyond the break. this is going to be a dramatic day in markets, i think. anna: yes. when they move so quickly that is when you have to watch that. thank you very much, mark, for spending the last half-hour with us to take us through those market moves. the market open is up next.
anna: welcome back to the european market open. one minute to go until trading. here are your headlines. powell's playbook, u.s. yields spike after the fed decision. the eu races for a decision on the astrazeneca vaccine. the regulator rules today on the shots safety. the bank of england is sent to emphasize its high bar for monetary policy. we look at decisions. good morning. just coming up to the start of the european equity session. we have futures pointing to the
upside here in europe. perhaps that is not setting up the overall global picture because we finished the session yesterday as underperformers in the u.s. we have seen deterioration in u.s. futures as a result of a spike up in u.s. 10 year yields. nasdaq features -- futures fell. nasdaq futures down by 9/10 of a percent. european trading day, the markets are opening up. opening up on the ftse 100. we have reasons to go higher, it would seem this morning. the overall message is fairly dovish. inflation forecast, unemployment estimate, they are saying they still see the yields going higher as a result of the
correct reasons. they are waiting for the data. they are not going to be guiding so much and running things straightforward. european equity markets are opening to the upside. we do need to be very mindful of how the latest from the fed is reading across and into global markets. the central bank will not raise rates until 2024. that is despite upgrading its economic outlook. powell also states about the recent jump in treasury yields. >> economic recovery remains uneven and far from complete. it has been severe for lower wage workers in the service sector and african-americans in spacs. the state of the economy in the
years ahead is uncertain. we are not done and i would hate to see us take our eye off the ball before we actually finish the job. we would like to see this for sometime. we have resisted the temp tatian to try and quantify that. we make progress on both spending and labor markets and inflation. fiscal policy overall was trying to avoid much of the scarring from the beginning. anna: joining us now is freddie lait, latitude investment ceo. one of the many people that this is focusing on, seeing the data,
not expecting unemployment to fall. they want to see those moves before they act. what you make of that? freddie: good morning. the first thing to point out is normally a dovish bank leads to yields and rates falling. if they are waiting for the data, it can lead to a start she pinning -- steepening of the curve. that is not a surprise. it is absolutely right of him to try and keep a lid on inflation expectations. the committee's view for inflation in the next couple years is around 2%. if you look across the market, you know there is going to be a short-term inflation that comes above 2%. i wonder what is going to happen when we see that data. even powell talks about the fact that we are going to see a
higher trend between level and patient, it is very likely to happen. my view is not that it does cause lasting inflation, it could be transitory. when you're in the eye of that storm and suffering on the higher level of inflation, wages, oil prices, what do you think the market would extrapolate at that point? and i think it would extrapolate higher inflation. anna: we sit here with a very much happening as we talk. there is a green light for steeper yield curves, given not just in the u.s., but elsewhere. how much deeper do you the yield curves get in the u.s.? freddie: previous cycles that have lasted 30-40 years would indicate you could have up to 100 points steepening, i think you could get there. it is unlikely to move on the
lower end in the next couple years. that means that the 10 year yield could get as high as 2.8% in this cycle. it is dependent on timing. if it happens quickly, if the yields carry on rising right now, before we are seeing the positive data. we are not seeing the negatives, or the economic growth or unemployment rate dropping, i think the fed would have to act. i think the pace is picking up at an acceptable level given the outlet and timing we are expecting. i don't think there needs to be a reaction. i think yields can be 2% by the end of the year. anna: do you think then -- you mentioned this earlier what the fed is preparing markets for when it comes to inflation -- do think the fed is preparing markets for a temporary spike in inflation and ignoring back or is the fed trying to prepare for a longer-term picture that looks
at a higher level of base inflation? freddie: i think they're trying to do two things. i don't think they are trying to prepare us for higher inflation. judging from the last years, it would be a change in regime to believe that is true. they are trying to guide us to two things. they are trying to say, inflation expectations will be moderate chile -- will be moderately above in the next couple months. ignore it, it is transitory. the reason they are doing that is to try and keep a lid on the 10 year yield period the 10 year yield and the 10 year real yield is what drives valuations across markets. there is an argument they want to keep equity market stable, i think, the comparison to historic analogy is hard to make
it. the wealth effect you get, the destruction of wealth effect you get from falling markets, which allows you to buy the dip every other time, is negated this time by the stimulus checks which play the same role. if the market had a little put more of a wobble and 50%-20% pullback led by those stocks, which we are likely to see, i don't think the fed is as concerned. anna: really interesting points. we will come back to you. freddie lait, ceo of latitude investment will stay with us. we are speaking now with parliaments and monetary affairs committee. she speaking at this moment. the economic outlook is surrounded by uncertainty. she sees a firm rebound in the second half. she also wants to talk about the recovery fund period it must become operational without delay. visible over a longer period.
we are pricing in gains we missed out on during the u.s. session yesterday. futures pointing to the downside. nasdaq now down. the dollar has got a boost. in the last hour and a half we have seen a spike in u.s. 10 year yields which has driven a lack of appetite for risk assets. nasdaq features sold off and money way into the dollar. we will keep an i on all these moving parts. dani burger is also keeping an eye on these. dani: one of the biggest movers to the upside is volkswagen, writing the momentum. they announced earlier, this tradition to -- transition to ev. continuing to ride that momentum. credits move up higher despite fallout from greenville. some differences when it comes
to manager bonuses as well as the management division. it is moving higher to date with the rest of the european bank sector as yields move higher reflecting what is happening in the u.s. one of the biggest losers dropping, the high end of the range for the growth is were analyst soft it -- analyst saw it. i want to get a quick check on what is going on. as you mentioned, we have seen a big uptick in yields as london has come online. demonstrating that powell yesterday was not able to stop the trend. it showed more people expecting rate hikes sooner despite the overall dovish tone. that is knocking back some of the large cap, bigger evaluate -- vili -- bigger evaluations. anna: thank you. let's get to some of our guest
top picks. we are joined by freddie lait, latitude investments ceo. i wonder if you are changing your investment strategy at all? whether you felt like it was prepared at all from what we heard at the fed. freddie: not changing anything. the key thing about this strategy is that it works. the strategy is in train. the thing we think about when we are allocating is to invest through cycle. to think about filling a portfolio with what is happening in the cycle. we have done that for cyclical stocks and have managed to find some great value stocks as well. super high-quality businesses that are not in that main stream consensus at the moment. it allows you to build a
balanced portfolio, which is still possible even given the markets level of value today. so many people have been leaning further and further towards that growth side of the portfolio. it has done well for a few years. i think that is a major risk and will show who can make it when yields start rising. there are opportunities that exist in the market elsewhere. anna: we will see as you suggested. what does that mean in terms of rotation story? you are talking along long lines of rotation we have seen out of those names and stocks. nasdaq features pointing to the downside. would you expect to see more of that? freddie: yes, absolutely. it had an extraordinarily five-year rally. it went downhill. the nasdaq could easily fall as
people rotate out of those high-quality but high valuation stocks into businesses of equal quality with more short-medium upside because of their cyclical nature. those businesses that have rallied, some sectors have rallied a lot, but are still trading attractively compared to many stocks in the nasdaq. we own some of those stocks, i am not putting it down, the opportunity is huge at the moment. there are other things to do with your money then just chase tech stocks. you can see much more meaningful rotation over the years, i am not saying right now. anna: so money other things to do with your money been just chasing tech stocks. another thing, the shortage of chips. we are just bringing into conversation some comments that we got from the bmw ceo. actually, we cannot do that. he mentioned, we did not have
any shortages, we cannot exclude it will happen, but we have a very detailed supply management. that is the take from them on the shortage. how do you see this as an opportunity? this is something that consumers of chips will be struggling with. if you are supplying chips, maybe you can be fairly confident with demand purely -- demand. freddie: absolutely. january early -- we have businesses that benefit from this theme which we are very excited about. sony is one. within their entertainment businesses they have a semiconductor business where they make chips for cameras and tings like that. that will do well. the other is texas instruments which we bought last year in the selloff. high-quality business. very diverse customer base.
pivoting meaningfully its business, it does not just make calculators like people think. last year, they made a bold decision and carried on building and growing. they sucked up all their cash flow to build up so that they can be there for the customers when the recovery came back. the recovery came back quicker than they thought so hopefully bmw are getting their parts from texas because they have the capacity and can keep them in business. anna: of course they don't just make calculators. what about the energy space? you make a point that it is useful hedge to owing stocks that will benefit from higher expectations. with the transition to greener forms of energy, how you expect oil price to perform? freddie: now that you're looking
some of these businesses in the u.k., who have made that bold transition. i think there are two things to say. i expect that massive drive for greener. there will be short-term spikes, 5-10 year. these businesses are transitioning faster and it will lead to non-opec supply growing again. opec regaining control of the oil prices and we are likely to see a higher oil price regime. that gives you more free cash low to transition to the new technology you are investing in. i really like the story from not perspective. it is compelling.
finally, from a portfolio construction perspective, from the notes, one of the greatest risks to portfolios -- even hours -- we are still nervous about inflation. it still makes you nervous. if you can build in some way of protecting against inflation, that is more than just gold, within the stocks themselves i think that is a great thing to reduce risk in your portfolio. having other commodities is a simple way to do that. anna: great to speak to you this morning. thank you for joining us. freddie lait, latitude investments el. coming up, wells fargo ceo explained why he is bullish. that exclusive conversation. still speaking with lawmakers at the affairs committee. lagarde has been saying a lot of things about it.
are by no means there. >> we are throws from the response we are seeing from our guests in terms of future reservations. i think it is a function of two things. number one, confidence that we are seeing a light at the end of the tunnel. also, tremendous trust in our brand. anna: light at the end of the tunnel or some optimism there from ceos of uber and disney about the recovery from the pandemic. we are 23 minutes into trading. this is the picture of markets. oil prices down. on the dax, we saw a change at the top yesterday in terms of who leads. very much the autos. the dax is out. the story in european markets, dow futures to the upside. nasdaq futures down.
coming off the lows we previously saw for these u.s. futures, all of that driven by a spike higher in u.s. 10 year yields and a steepening of the curve. 1.7% is where we trade. ceo charlie, sees the economy come back stronger. he added that he will not rush people back to the office before summer. >> right now, 90% of our branches open. we were down to about 70% at the peak of the crisis. when we think about bringing employees back, i am a firm believer that really great things come from people being together. first and foremost, this is a health care issue. it is extremely serious. i am not interested in rushing people back to the office because i think that is the right thing to do, we will bring
people back when it is safe and we will give people notice. i am hoping that with the increase in vaccinations that it is sometime around summer when we can get back to life as normal. we are going to play it by ear. it will be city by city, state by state. we will make those decisions when it is safe. that is the most important thing. >> we are seeing the economy about to take off. there has been a lot of monetary and fiscal to melissa. a lot of banks, when you came to wells fargo last fall, you had one hand tied behind your back with the caps from the fed. when you think you will get rid of that? >> everyone asked me that and i wish i could be more specific. we note the work that we have to do to get the cap lifted. we are doing it. i am confident we will get the work done. in the meantime, we have an amazing franchise. we come into work every day and
we serve our customers extraordinarily well. the dedication of all my partners and teammates around the country do it. we will work through what we need to work through an we can grow the asset company when we can do it. >> we are seeing gdp growth, what are you looking at in terms of growth and how can that translate into is this or wells fargo? -- into business for wells fargo? >> we live and breathe by u.s. consumer, smaller companies, middle companies as well. to the extent that they are doing well, we do well. when they are not doing well, we do not do well. what we are seeing today is remarkable progress with the vaccine. with the rollout of the vaccines. consumer demand is extremely high over the last couple weeks,
we have seen material increases in consumer spending. that is before the stimulus checks have arrived, which are -- the deposits are just arriving today. you put all those things together plus ongoing support of the fed and we are really lish in terms -- really bullish. >> at motors we are solving this problem.
anna: welcome back to the european market open. 30 minutes into our trading session in europe, and we have european stocks up by .3%. the dax up by just shy of 1% this morning. let's show you the sectors on the move. autos and auto parts up by two point 7%, so we continue to see some gains. yesterday we saw new leadership in the sector, at vw, taking away from sap. as a result was the autos as a very strong sector.
chemicals to the downside, beverages and tobacco, those are the sectors that lose ground in this morning's trading session. let's get an update with laura wright. laura: if u.s. trade talks in alaska go well in china, beijing wants a meeting with joe biden and xi jinping next month. it would be organized around april 22. they want to show the leaders of focus issues like climate change. facebook is extending a policy to workers, victims of sexual assault and domestic abuse. all employees will be able to take as many as 20 paid days off if they or a relative have been a victim of a crime. chief operating officer charles sandburg spoke at the bloomberg a quality summit. >> i think this is recognizing that this is something that affects everyone.
it is a situation where you need paid time off and not just for yourself, but for a loved one. laura: myanmar's ousted leader is facing charges of corruption. he could face up to 15 years in prison. the military that seized power has filed charges against her. more than 200 people have died in nationwide protests. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. anna: laura wright and london. joining us with the latest on the market. dani burger, we have seen some big moves in treasury markets, and in nasdaq futures. take us through the latest. dani: that relief after yesterday's fomc meeting, that did not take long.
we see the pain and the duration trade. it has been selling off, where the you want to look at the u.s. or german -- it really does seem that powell, whatever he says, is not enough to stop the trend. as the u.s. economy is improving, we see unemployment move lower, and the fact that powell is saying that he is willing to remain on the sidelines as inflation and the economic picture gets better until we see price pressure. i want to move into the u.s. futures market. it is having an impact on the higher valuation stocks. it is the duration trade that is in for some pain at the moment. that was the s&p 500's trade yesterday. you can see the flipside of what is happening today with nasdaq futures down nearly 1%. by no means is this the worst thing we have seen for nasdaq futures. we have seen it deeply into the red. one thing to keep your eye on is that the vix yesterday fell below 20 for the first time in about a year.
it is now inching up ever so much. the valid had picture that's the volatility -- the volatility picture -- this is another thing to keep an eye on when we are looking at the file out spike higher in bond yields, the fed and powell not able to stop that trend. anna: dani burger with some of the moves that we have seen this morning. let's get some more from mark cudmore, who joins me from singapore. exciting data as we bring you back into the conversation this morning. i'm pretty sure you that you said yesterday morning that traders wanted yields to go higher, whatever we saw from the fed last night. you were painting a picture of we could have seen a hawkish fed, each we didn't, but we could have seen a hawkish fed and people would have priced in a higher interest rate. or we could have seen a dovish fed, which we did, and then people would have priced in more inflation. mark: i did not anticipate the move to be quite the strong.
i did not expect that the message from the fed would be quite so dovish. i think it was extraordinary what they did last night, and the market has belatedly woken up to it. as europe came in, why is the yield curve going to stop moving now? i don't see what the logical stopping point is for 10 year yields. obviously in the short term we have stopped yields. i don't see why 10 year yields won't go to 2% in the next couple of weeks unless we get them fed pushback. if we get fed pushback, that would undermine their credibility. this is a really exciting day in markets and you will not be able to give me away that easily. anna: an exciting day, and we are grateful for your input. let me ask you about something else ahead of the fed, the slr, which was a no-show ahead of yesterday's meeting. the exemptions that exist for certain aspects to be included in that leverage ratio, and i
wonder whether that adds some interesting direction for markets in the next couple of days, or with the dovishness from the fed -- was the definition -- was the dovishness of the filled so overwhelming, that that was going to be the story. mark: the slr issue is still outstanding come as you say. we are running out of time to get a decision. the exemptions expire at the end of this month. there was a lot of uncertainty of what the delay would mean. my base estimation is that the fed did not want to distract from their policy message. if there is a reaction of me slr, they can distinguish it from their policy message. they wanted to deliver a dovish message. now you can see their reaction. they know it is not confused, the slr message. i have no idea which way they are going to go, but it is an important issue that will be decided by early next week. anna: we will be watching for that very closely. let me ask you about the global
yield environment and the read across what we have heard from the fed into other central banks come into other headaches that central banks might face. i'm thinking about europe, the ecb in particular. we just heard from christine lagarde come to the yield increase getting ahead of the economic recovery. that is a message we have heard before from europe. but the answer before has been more of the same pet buying, not increasing the overall pet envelope, just seeing more sooner. mark: they are going to be forced to back their words up with concrete action in the days ahead. the ecb last week was clear they did not want yields put away. they are looking for a flattening curve. it is a very different message from the fed. last week they said they didn't want yields to go higher, but they were quite vague. now they cannot afford to be vague anymore. there will be steepening pressure and oprah yield pressure across the globe. we are seeing that -- steepening
pressure and upward yield pressure across the globe. we are seeing that. i think lagarde is firing that shot this morning, they can clear they will step up that action. anna: and we are not done with his central banking theme, are we? we have a couple of central banks at least set to speak today. i'm here in london and you may be thinking of other central banks. what's on your radar? mark: the bank of england are likely to be much more in the fed camp and say this yield affects good growth, and i think that will add more fuel to the cp. i will backup the idea that emerging markets are shifting hawkish. that plays into the same theme. we also might see norges bank hike. apart from the ecb, we are seeing the central bank allowing higher yield on the curve. that means that there is a whole different dynamic. the markets will have to face. we were seeing a steepening
curve a while ago, but it was expected that she was not expected to be quite so drastic as we have seen in the -- it was not expected be quite so drastic effort have seen in the last days. anna: coming up on the program, europe races for a decision on the astor vaccine by its regulator after a messy dissension by -- on the astrazeneca vaccine by its regulator as a messy dissension by other countries. this is bloomberg. ♪
anna: welcome back to the european market open. 42 minutes since the start of your trading session. the ftse 100 is lacking behind. auto and auto parts continues to be a strength to the upside for the european equity markets, and we see that with the substantial dax move. europe is bracing for decision by itself regulator whether the astrazeneca vaccine is safe. the latest blow to the sputtering rolled of the vaccine in europe -- the european medic agencies has said -- medicine agency has said that it is say. joining us now is helen petousis-harris, university of auckland associate professor. she currently co-leads the data
network and collaboration in safety studies. a perfect voice for us today on the program. good to speak with you. aced on your expertise around vaccine safety, what would you expect the ema to say today? helen: i guess it is hard to predict what they are going to say, but they are going to be balancing these events that have happened and try to predict what a likelihood of mortality is. but also this enormous number of vaccines is a huge denominator and a small number of cases, and i think we have to expect this is going to happen whether it was blood clots or something else. we are going to see a lot of things happen with vaccines when we give them to so many people. anna: i see one line coming through from the italian regular , saying that the ema may indicate possible risks with astra. they would have to find a
connection between some of the dreadful events that have been reported out of germany. they would have to find a connection between those and the vaccine to make that something they wanted to do. it is that the kind of thing that you might see around vaccinations? helen: sure. if you think that there is a chance that they -- that there could be a link, what you can do is update your information that you give to people and say that there is this potential link between the vaccine and some kind of event. as it happens all the time with other medications, so it is a matter of process really, and people can be warned. but you have to also appreciate the civics. these are very rare cases in the whole scheme of things. anna: yes, indeed, and some people used the analysis of the number of lives lost in the interim when you suspend the use of vaccine when you are doing these investigations. is there any framework that we
can cling to when thinking about that? when is it right to suspend use of the vaccine while investigating, and when is a right to keep on vaccinating until you have something concrete to say? helen: i don't think there is a magic are, but i think you have definitely got different situations and different locations. for example, in these countries, there is a clear risk for disease. there is a lot of covid disease out there. when you are considering -- while you're sort of pausing to consider whether there is an abundance of caution, you have to balance that lack of confidence, which you are seeing now, confusion, and also the number of cases of disease that you might expect as a consequence of the disease is so much greater. anna: on another subject, thinking about the vaccination push more broadly, more vaccine has been ordered then can be
used. it is understandable, but some of them have also pledged they will then give away vaccines that they don't need. what is the definition of vaccines that we don't need in this context? is there going to be a choice between saving up vaccines to update vaccines next year to give people in the u.s., the u.k., in europe, another chance to be vaccinated next year when we have new variance, that's new variants, or will we see the stockpiles pushed out to -- new variants, or will we see the stockpiles pushed out to other parts of the world? helen: i think people would hate to see vaccine nationalism taking over. i think we are in this together and nobody can get out of this until we have beaten this thing back. the only way to do that is with the use of these vaccines. if these vaccines are sitting around being stockpiled, that is actually not going to help us get out of this at all. anna: thanks very much, helen. good to speak with you.
helen petousis-harris of the university of auckland. thank you for speaking with us on the european market open. let's get back to businesses with laura wright. laura: apple plans to announce new ipads as early as april. the tech giant is refreshing it's pro line-up, with improved cameras and processes. more people are working and studying from home. j.p. morgan and bank of america are condemning racism against asian americans following the shooting in atlanta where a man killed eight people, including six asian women. it is the latest in the surge of violence seen during the coronavirus pandemic. it is said to be part of a long history of discrimination against the group. >> it is not just 20 or 30 or 40 years old, but it goes way back to the 19th century, where the u.s. passed the chinese exclusion act in 1885 because of
what was then consider the scare of the yellow peril. laura: that is the bloomberg business flash. anna: a quick look at the market, 47 minutes into our trading session. you see the spiked up in u.s. 10 year yields, 1.7295. the u.s. 30 year yield on the move, and we have seen the steepening of the curve to varying degrees. nasdaq futures down by 1.3%. testing those earlier lows again, nasdaq futures sinking as treasury yields climb. we have been keeping a press conference given by ecb president christine lagarde, speaking with lawmakers on the european parliament economic and parliamentary affairs committee. she has been talking about the fiscal stimulus and also talking about the rising bond yield environment. we will look at everything she
>> we really tried to up our game as it relates to diversity and inclusion as part of our core purpose over the last year. but if i'm honest, we can do better. we are doing a pretty good job of acquisition, not so much a good job in retention. >> we have seen women drop out of the workforce in tremendous
numbers. we have seen 2.5 million women drop out. in december, women lost -- that means women lost jobs and bid gains. that is how women can lose more than 100%. we are in a crisis. >> in a country like the united states, if you are born in a poor family, it takes about five generations to get to the average income in your society. so clearly our societies are reproducing, not reducing inequality. >> the economic giveback of the pandemic has fallen disproportionately on women's shoulders. for the first time in history, for example, the image, that's the economic downturn in the u.s. with unappointed and income law -- the economic downturn in the u.s. with unemployment and income losses is affecting women more than men. anna: lots of really interesting insights at the quality summit
coming through from that event. we are 52 minutes into the european trading session. this is what we have for you right now. the ftse 100 has been underperforming. this toxics hundred flat despite performance on the decks -- the stoxx 600 flat despite performance on the dax. these are the main moves we see on the markets right now. i think we have laura cooper standing by for a conversation from our markets life team. all of this coming the day after the fed. let's get to laura, who can give us her insight. were you surprised to see what we see in u.s. 10 year yields? are you surprised by the pace of this movie? laura: certainly the pace seems to be a knee-jerk reaction, but i am not surprised that we are going to see curve steepen in the u.s. that is really because the fed gave the green light to that potential steepening trade.
ultimately, they are going to stay on the sidelines until they see actual inflation run hot. that is something we don't typically see in monetary policy. usually central banks want to be proactive. but in this case they are going to be reactive. they will have to see actual price pressures. i think that point, markets are questioning that that could actually mean a significant tightening going forward. that is why we could see some jitters in markets over the coming days. anna: jitters as we all adapt to going back to the future or back to the past, perhaps. going back to the days of pre-dfc, have made similar comments where we were very much more data dependent, and it was less about the forward guidance. the fear during that period, before the financial crisis, was that central banks were often accused of being behind the curve. laura: it is something similar
that we saw, that they fit actually tightened policy without actually seeing those price pressures come through, and that resulted in them actually having to unwind and then ease policy again. so this time they are signaling. if we just look at their growth forecast, they anticipate -- they have hotter inflation above 2% through their projection period through 2023, but at the same time they are going to stand on rates. even when it comes to potential tapering of bonds, they are not thinking about doing that yet. they are still clearly far away from that, but i think markets are going to continue to test the resolve on that front. anna: let me ask about something else because perhaps we have not given it enough attention this morning. we have been distracted by what is going on in markets. the nasdaq futures down on the treasury yield spike. on markets, we have been asking
about the biden-xi relationship and how that will affect assets because we have a u.s.-china meeting taking place today in alaska. laura: i think that is crucial, that the geopolitical tensions have been brewing under the surface, and they could potentially escalate. yes, we have that first meeting today with top officials, and i think the signal so far is that it is going to be likely more contentious than markets expect. now, ultimately they could reach some kind of conciliatory tone, but i think this is just something that kind of is aggravating the rotor picture of geopolitical tensions. that's the broader picture of geopolitical tension -- the broader picture of geopolitical tensions. we see individual countries targeting the tech sector, so i think it is a risk. anna: it is a risk, one we will keep an eye on. laura cooper talking about the tech trade. futures -- nasdaq futures down.
to focus too much on the exact timing of a potential rate increase that far into the future. >> the stock plot today, there were some pretty significant changes. not dramatic, but there is more and more of a consensusbuilding. this rate increase is coming faster than the chair has advertised. >> you put all of those things together plus ongoing support of the fed, and we are bullish in terms of what the third and fourth quarters could look like. announcer: this is "bloomberg surveillance: early edition," with francine lacqua, matt miller, and kailey leinz. francine: good morning from london, berlin, and new york on this thursday, march 18. our top stories today. it is not your grandfather's fed. jay powell hammers home a dove this message, a clean break with the old federal reserve. europe braces for action on the astrazeneca shot. and credit suisse